Friday Roundup: Uber Cuts Rates in 48 Cities

Before I dig in, I just wanted to give a quick shout-out and word of thanks to JackRoss who’s been doing the round-ups for the past few months pro-bono and been doing a great job at that. Jack is moving on to bigger and better things at VICE as a sports contributor so today I’ll be handling the round-up.

Well the big news in rideshare happened yesterday afternoon when Uber announced a slew of fare cuts in 48 cities across the US. Most cuts were in the 10-25% range but there were a few cities that saw their mileage rate cut in half. Along with the cuts, Uber also rolled out a guarantee for peak hours that ranged from $14-$20/hr depending on the city and a guarantee for non-peak hours that ranged from $10-$14/hr. This number is before Uber’s 20-25% commission so you can see that these guarantees aren’t really guaranteeing a whole lot.

I’ll be releasing an in-depth YouTube video this weekend (now live below) with my thoughts on the whole situation but for now I think a wait and see approach is best. Obviously there are a lot of drivers who are upset and for good reason, but the only thing I can possibly think of as to why Uber has made these cuts is to get more passengers out on the road. As many of you have probably realized, the beginning of the year is a slow time for rideshare (especially compared to the Holidays) drivers and Uber is all about growth.

Lowering prices means more passengers and more passengers means more growth for Uber. It doesn’t necessarily mean drivers will earn more money (despite Uber’s best efforts to convince us otherwise) but it’s hard to tell without unbiased data. Speaking of data, I find it odd that Uber has only released numbers for two cities (New York and Chicago) out of all the cities they operate in that show drivers are now earning more money than before. It seems to me if drivers really did make more money with lower fares than they would be able to prove that with data for every city nationwide.

Either way, these rate cuts definitely hurt but I don’t think they are the end of the world. There are a lot of drivers out there who may feel that these rates are too low but there are also a lot of drivers out there who are going to make the best of the situation and figure out a way to persevere and work smarter, not harder. I know I am.

A couple good articles about the fare cuts:

Here’s a good theory from Ellen Huet at Forbes and if it’s true, it may be a smart move by Uber. Personally, I think drivers can make more than the guarantees though by working both apps (Lyft and Uber) at the same time.

Ok on to some other stories…

This article gives a really nice breakdown of all the places Lyft and Uber have been expanding to worldwide and within the US. But there’s only one thing missing: “Sidecar? Anyone seen Sidecar anywhere?”

It’s not often that Uber experiments with new services in foreign countries but maybe two established local competitors have something to do with that. I think it’s cool that Uber is trying this out but sometimes I worry that maybe they are spreading themselves out too thin.

I read a story on Wednesday about 5 of Uber’s 6 NYC bases being closed down and then the next day they were all back up and running. UberX has not taken off in NYC like it has in other cities and I wonder if it has something to do with the competition from taxi services. From what I hear, taxis are pretty reliable in NYC and I even hear you can pay with a credit card!

I'm Harry, the owner and founder of The Rideshare Guy Blog and Podcast. I used to be a full-time engineer but now I'm a rideshare blogger! I write about my experience driving for Uber, Lyft, and other services and my goal is to help drivers earn more money by working smarter, not harder.

This will force a lot of great drivers to consider something else. That should lead to poor customer service. Appears to be a death spiral. Lyft on the other hand has cleared drivers to drive, but put them on a waiting list. Since very few PT have occurred, there is no need to bring on more drivers. Very smart outfit.
“Hey buddy, Uber just dropped their rates, let’s go somewhere and save some money!”. This is not going to happen.

Fact: Riders do not know their rates, so you gave them a discount on something they don’t even know what the previous rate was.
Riders have stated they would pay Uber more for the great service they receive as long as it’s cheaper than a taxi. So some rocket scientist decided to lower the rates???????
Based on the new rates, expect to make 20-30 cents a mile driving for Uber based on an average $10 fare. Would you take anyone 5 miles for 2-3 dollars?

I definitely agree that there has to be some sort of tipping point where if rates get too low, the service will start to suffer. But Uber has built a ton of goodwill with the public so maybe they are experimenting with that point and confident that once they reach it, they can bring fares back up and not have any ill-effects.

I think driver retention is something they really need to take a closer look at. There is an almost infinite number of pax but there is definitely a finite pool of drivers.

Matt

I saw the announcement yesterday from Uber as earning “Guarantees” and initially got excited. How naive of me.

I have a normal career/day-job. I don’t need the money, and cherry pick my Uber outings like you Harry. I originally read Uber’s announcement as an enticement to go drive more often, until I read all the details and got to thinkin’…. Wait a minute! Minimum driving requirements? Price cuts? Basically, at-least in my region, I’d have to shut off Lyft and solely drive for Uber and to hope I meet their minimum requirement of 1 ride per hour to make their “guarantee.” This can be surprisingly difficult at times, even in hot spots.

I have an economical car with high mpg and low maintenance costs. But even then, if doing this during peak hours, it’d essentially come to $15/hour after Uber’s cut, gas, maintenance costs, etc. And $8/hour during regular hours. What a deceptive email by Uber. I don’t know Harry, I agree it’s best to wait and see, and I will certainly be interested seeing clever ways people change to try and squeeze out any kind of worthwhile income from this. I will probably give this “guarantee” thing a shot when I have spare time. But one can’t help think at this point, even a part time gig as a night security guard could be a better option for moonlighting. This approach by Uber will probably keep their full-time drivers who have nothing to fall back on, but drop the spotty part-timers like me. Who knows, maybe that was their strategy after-all?…

$8/hr is too low for probably everyone, I think most of us want to be in the $15-$20/hr range at a minimum. Like you, I don’t need the money but I don’t want to work for nothing 🙂 There’s a lot going on here, so I think wait and see is a good approach.

PW

I’m also getting tired of the “income” hype, which is more than misleading, it is false advertising for drivers. To be somewhere accurate one needs to include the mileage and time expense TO the rider, and deduct at least
the government deduction of $0.56 per mile. THAT is the profit before taxes. This is a new technology that will shake out via supply and demand for riders and drivers. Giving good service is a morale factor, rather than
profit factor, till the driver can’t afford to drive. The freedom of this work does not have an unlimited value to the drivers, we do have to pay for our vehicles. When it’s been around long enough and the cost of
depreciation, having the car worn out before it is paid for, and the cost of high mileage maintenance hits, and more than just the cost of gas hits the new cars, the driver market will crash.
Today, running both aps, all my hits were from Uber riders. One rider said that Lyft was really advertising in the area, so they are trying for us. It is almost impossible for me to make a profit since I drive and have the cost of a “XL” vehicle,
but over 90% of my rides are “X” paying rides. I think when U & L can benefit from having the “X and Plus” vehicles, they should knock of 5% of the fee when the vehicle is being used on a regular fare. That
would not cover the difference in operating cost, but it would help, and show support for that class of service.
Thanks for all you do.

Yea a lot of what they say is misleading but I mean they have to make driving seem as attractive as possible. All companies do this.. and some are much much worse.

Ever heard the term ‘unlimited vacation’? Ha yea right, companies offer that now a days and then at the end of the year your boss goes over your performance review and says well you took 3 weeks of vacation this year, wait I thought it was unlimited…nope.

Darcy Faegre

I’m absolutely confused by this strategy of constantly cutting rates.

This is what I hear from customers in my city:
WOW! You got here so much faster than any taxi I’ve ever called.
This is a nice car.
Your service is so much better than a taxi.
That’s it for the fare? That’s about half what I pay in a taxi.

So, um, how is dropping the price going to solve the problem? Price is not the reason for a lack of riders. It’s marketing, marketing, marketing! All I see in the media is bad news about Uber. And I don’t see any advertising for them. Word-of-mouth is great but a big company can’t rely on that solely for customer growth. They really need to get out there and spread the word about a high-quality, low-price alternative to taxis. I have yet to find a customer who has said to me, if only you were a little cheaper I would use you all the time. What I have heard customers say is “I got hooked on this with the free ride(s).” And that seems to be the marketing that is slowly being pulled away.

Unless there’s a change in the advertising and marketing of rideshare I would expect things to slowly get worse. Fortunately there’s a huge market in rideshare and someone is going to get this right. In the meantime I guess I wait around for that company to step up.

It’s tough to say for sure because we’re not inside the company but there is obviously a correlation between lowering fares and increased ridership. Otherwise, it would make no sense to lower fares and piss off drivers.

I have heard the same from riders too, although it’s easy to say that, most people really speak with their wallet. Definitely have to be patient and I think you have the right attitude, someone is going to figure it all out and the prices/situation today are by no means what it will be like, 3 or even 9 months from today.

Darcy Faegre

Wow. Out driving now and the fares are ridiculously low. Without the guarantee i would have hung up my Uber hat tonight.my only hope is that some drivers do and i end up with more fares. This is a travesty and a major screw – up on uber’s part.

Mannyccs

Uber Screw up the Whole thing … Today I got less Drives and ridiculous fares less than 40% of 3 months ago…

Darcy Faegre

Update to my previous post. Um, yeah, no, done with that. Totally not worth it.
17 minutes 10.5 miles $13.72 gross. Not sure if that includes the $1 “safe rider” fee but even if it doesn’t the net is under $11. My friends would kick me more than that for a ride like that. If Uber wanted to find out what the market would bear they are either there or about to arrive there.

What city are you in? If you do two rides at $11 in one hour that’s $22. What do you normally average? I can assure you there are lots of people willing to happily drive their car around for $22/hr.. don’t you think?

Darcy Faegre

I am in Fresno and last night I averaged 1 ride per hour for the 6pm – 9:30pm time frame which I drove solely because of the “guarantee”. $11 was my BIG fare (it was actually $10.18 net) and it was one that took me 2/3 of the way across the city. The second largest fare was $6.19 (net) and the smallest was $3.88 (again, net).

But let’s pretend that I didn’t work those horrid hours and that I had gotten only those “big” trips. I think your math is entirely disingenuous (and I think you know it) because you are using gross dollars without taking into account taxes, expenses or the lack of any benefits (I realize as a side job it doesn’t need benefits so I’ll also do that math).

2 rides an hour at $11 gross each = $22.
Each ride would be ~11 miles for a total of 22 miles but I’m adding 50% for the distance to get to the fare so it comes out to 33 miles.
Assuming gas mileage of 30 mpg (which is more than liberal as it’s all city driving and very few people get higher mileage than that (I get substantially less).
I’m also assuming a gas cost of ~$2.50/gallon. While it might be cheaper today it can’t / wont go much lower than this.
Gas expense for these two trips is $2.75.
Taxes of ~14% cannot be avoided due to Social Security and Medicare (unless you have a job making enough to max out) so that is an initial tax of $3.08.
Let’s assume an incredibly income tax rate of 10% (it would likely be higher since you either have another job or you make enough to live on this alone) and income tax is $2.20.
Without getting into maintenance or a lack of benefits we are already down to income of $13.97.
If I further take out $0.05/mile for maintenance and vehicle depreciation (again, ridiculously low compared to reality) that’s another $1.65.
We’re now down to $12.32 / hour.
If this is a side job and you do it for S&G then it’s not all bad but you would have to increase the tax rate. Also, in terms of the business model people who are doing it on the side are doing it only at peak hours and that is not going to instill customer confidence in the ability of the brand to be reliable.
So some people have to do it “full-time” or in off-hours.
These people need to take into account the minimum of 25% value of benefits to income, i.e. life insurance, health insurance, vacation pay, holidays, retirement, etc.
That would take another $5.50 off their net putting us at $6.82 an hour. And no, I don’t think a bunch of people are going to be willing to work for that.

And let’s review my ridiculous assumptions:
Gas remains as low as it is currently.
Taxes are at the rate of someone near poverty.
The two $11 trips happen every hour worked (including off-peak) or they at least average out to that.
Vehicle expenses don’t vary and don’t increase and stay at my extremely low rate.
You don’t get in an accident and lose your insurance…. and your ability to make a living.
You don’t give out any “premiums” like bottled water (at $0.10 a piece).
That you don’t get a ride that takes you to a location where you won’t get another fare (thus no need to drive to “relocate”).

None of these assumptions are much in touch with reality. If I use my actual numbers from last night I paid for the privilege of driving for Uber (I’m guessing around $5-10 but that’s a total guess). And the people I picked up got a nice ride in my relatively new car with a bottle of water thrown in for free at far less than half of what a taxi would cost them…. far less.

The reason this business model works for Uber is because they have NONE of the expenses we just talked about, those are on the backs of their “contractors”. Their expenses remain nearly fixed regardless of how many customers they have. Admittedly they have some increased costs with increased ridership but those increases become less and less with increasing numbers. And that’s something the drivers can’t do! It’s actually genius for Uber because every ride makes them $1 in their “safe rider fee” but they lose very little on the percentage they keep. So, the math on that.

These fare decreases have one goal… putting money in the pockets of investors / entrepreneurs. And they could care less about what it means for drivers as long as they still have drivers. I can be pretty well sure that drivers aren’t doing this math and Uber has a finance department, actuaries and all, on top of it. Their current M.O. is to see what the contractor market will bear while they boost their bottom line and get new rounds of funding.

But then maybe I’ve made some egregious error in my math that you would like to correct me on. I’m open to discussing how my numbers might not add up.

I COULD work just the bar rush on Friday and Saturday night and those special holidays (like NYE) where there are non-stop rides and probably make some money (albeit far less than I did just a month ago) but I will not support the type of capitalism that tries to make money for already wealthy folk off the backs of people who are just trying to stay afloat.

Yyhh

These people are stupid. Nothing short of it. This is not a strategy to beat lyft or sidecar, this the start of new age slavery.
Nothing changes for Uber. It’s the drivers that suffer. Now it takes twice the time double the work exp…… To make what little they made the day before. Off course Uber will guarantee hourly’s. The know with these prices most drivers will quit or go elsewhere. Its only natural for demand to increase when prices drop. , . when Uber guarantee hourly, they know there will be enough demand to cover the hourly they promised, therefore, the driver will not get hourly, instead, they get lots of underpaid rides, 3,4 times the work and effort, running around all day all night like little rats looking for Cheese crumbs!!!
How does that sit with public safety?
How, is Uber going to offer IV stations that bumps Red bull into a driver’s system and say “uber on” ?

Yyhh

The IRS estimated the cost / mile at $.53. Hmm $.75/mile + $.13/ min – $.53=$.35 /mile. To make the $75k they claim drivers make you will have to drive over 214000/ year or 585 miles/ day 365 days a year. Is this even possible? It gets worst, because you have to drive to get to your ride, so you can add at least another 150 miles. More than half the UberX drivers are from other venues. They aren’t aware of the stress of the job. How can a driver survive this. If Uber is all about ride service great public safety so on …. How is driving over 700 miles/ day 7 days a week safe for anyone?

Kristin

Just wanted to clarify Harry that in Denver the rates go as high as $24 an hour for peak periods Fri and Sat nights so I’m still sitting at that wait and see area. ..

You’re right, thanks for the correction. That definitely makes things more interesting…

Kristin

And actually our regular weekday hours are guaranteed 18 with the exception of the wee hours 12am-6am & 3-6 on weekends which are only guaranteed 12.. we will see. I still try to spread the Lyft love wherever I can but when you stay busier on Uber it’s really hard to not drive them..

Fresno market is $10/$24 off/peak. Keep in mind that that guarantee is gross, not net. Since you are required to get one fare during that time they will use the gross off of that fare to reduce the guarantee… meaning you won’t actually get the guarantee.

Darcy Faegre

And I didn’t see any of the guarantee in the first week even though I met their very stringent requirements. I’m not terribly upset about it since it wouldn’t have been a lot but I did expect them to live up to their word.

Mannyccs

I will like to meet the UBER genius that lower the rates… make a ride of 5 miles for $2.4.. it’s ridiculous even the fact that 20% goes out in gas and maintenance fees if you add taxes…. I Will Like to know if UBER realizes that there is a limited number of drivers… Also cheaper fares do not means more riders taking rides due to cheaper rates… you got more drives per hour because, you have more people using the services due to drivers recommendation and users spread good service comments… I loose 30% of income in the last reduction of prices!!!!

Cheaper rides certainly does mean more riders/more rides. I know that I take Uber way more often now that it’s cheaper. What it doesn’t necessarily mean is more $$ for drivers. You may get an extra ride or half ride per hour but that will likely barely make up for the lower rates and increased wear and tear, hence why drivers are making less.

At the end of the day though, if drivers like you and I are willing to continue driving at these lower rates and the quality of service is maintained it’s a smart biz move by Uber to lower prices.. The ideal price for Uber is when drivers are paid just enough to provide high level of service.

Yyhh

Sir, with all due respect, YOU ARE A MORAN.

Yyhh

Are you sure you are not paid to do this?

Yyhh

And Hence this, you go and be a Uber slave. And wipe off that stupid smile off your face. You don’t know what you are talking about. When are you coming out of the dark ages? In some third world country, drivers are making twice as much with Uber than most of its drivers in the USA.

Yyhh

And you want us to keep doing this at these prices. Uber is a Paranoid institution.
They are cutting prices not to make drivers upst or riders happy. They figured they got something good going but they highly screwed it up, with all the negative public relationship. Now they are worried that someone is coming along to do this the right way. Another big company . So when they cut prices and offer the lowest rates possible, they leave almost no room for competition. It’s their own survival they are worried about. And just like their mentor”the pharaoh “they will have the slaves carry the day. With abject humiliation. Wake up and smell the Uber. It’s pooper!

Mannyccs

THIS THING OF CUTTING RATES STINKS … I WAS DRIVING IN MIAMI BRICKELL- MIAMI BEACH AREA for 3 HOURS, AND ONLY GOT 2 DRIVES AND 2 CANCELLATIONS I MAKE ONE SIMILAR TRIP YESTERDAY AND GOT $20 TODAY I MADE ANOTHER 2 MILES SHORT AND GOT $13 THE APPLICATION STOPS SEVERAL TIMES IN THE MIDDLE OF THE 50 MINUTES.. WOWWWW….. AHJA SO YOU DON’T QUALIFFY FOR THE GUARANTEE………, AND NOW WE HAVE NEW SET OF RIDERS….. THAT REQUEST INEFICIENT ROUTE TO REQUEST FARE REDUCTIONS… I hang up my hat tonight… probably will keep driving for FUN with UBER and Know people but don’t ask me for quality service … NO MORE COLD FREE WATER or candies even a cookie….

As I stated last night, the recent move has caused me to hang up my Uber hat. I was already on the fence about Lyft fares so I need a couple days to cool off from this before I decide if I do any ridesharing again. Fortunately for me quitting is as easy as not turning on the app and being re-hired just as easy. In the end I do feel like I’ve been sucker-punched.

Thanks, I saw 🙂 From Uber’s perspective though, seems like a pretty good business move. What would lead you to believe that they don’t know what they’re doing. I mean $40 billion doesn’t magically appear out of nowhere..

Like I always say, being a rideshare driver is best for those who don’t need the income. If fares drop too low, you can pull back on hours. If they go up, scale up. It obviously sucks because it’s a fun job but if other people are willing to drive for less then you need to move on or at least wait and see what happens.

Darcy Faegre

If I told you that you could get a seat on a new airline for half the price of any other airline you would snap it up and be happy about it. If I told you they only sold first class seats you would wonder how they can pull it off. If I told you that you got food service and there were no additional charges for baggage or anything else you would think “there’s a business model that’s going to fail.” This isn’t a business model that can survive. They are making money off the backs of drivers. There is no reason that Lyft and Uber cannot survive in the same markets at a reasonable price. The only explanations I can think of for these tactics are an impatience on the part of investors (and entrepreneurs) to get a huge return. Simply doing the math shows that this is not a sustainable level of pay and that things will have to change. I’ll wait for that day to come.

And in regards to $40 billion magically appearing…. venture capitalists (and investors generally) have made plenty of bad bets. For me this is increasingly looking like a bad bet for them. For Uber corporate it’s a genius move. In all of these fare reductions the only thing that hasn’t gone down is their “rider safety fee.”

Mannyccs

Good point of view It’s exactly yhe same feeling of several friends drivers that. HANG JP THE HATS H Y ESTERDAY….

Rideshare Report

Any logic assuming drivers earn more with increased demand from new or increased user base is an excuse to unknown ulterior motives at this time. There’s no way drivers are earning more now then during the period when the new markets where entered. Especially when markets are experiencing a 2nd and 3rd fare decrease. Not to mention raising supply to meet new or increased demand simply evens out the metrics with the exception of a drivers increase earnings. I suspect Uber’s move is designed to build a user base at any expense being there is more value to market to future users then profiting from them now. Unfortunately, drivers value diminishes along with the passenger experience and quality of service. The other possibility is Uber is building a well conditioned user base, fully dependent on the services where an increase in fares in the near future would not effect a change in consumer usage. This would at some point bring Uber’s model into the black. My 3rd theory is regulations may eventually be focused around surge pricing and the fare structure. Fair driver value and earnings may be a factor in evaluating and forcing fares to be set based on demographics, taxi rates, minimum wages, cost of living, and cost associated with operating a vehicle as a driver for hire. Uber may be simply preparing for the what is eventually ahead.

Yea I think we’re all in agreement (drivers, not Uber) that lower fares mean drivers make less. I think you are on the right track, a lot of drivers don’t think about it from Uber’s point of view but Uber wants to pay drivers as little as possible while still maintaining their service.

It only makes sense that they keep lowering the prices to figure out what the tipping point is. If these prices are too low, then drivers will leave and Uber will be forced to raise prices. It’s pretty simple supply and demand.

Darcy Faegre

Rates dropped twice in a little over two weeks. I don’t think they could have possibly collected enough data to determine that the first cut wasn’t enough. There’s something more going on then finding the tipping point.

ChilePowered

Agreed, from a driver’s perspective and personal experience. And I have riders that are as concerned about the drivers as we are, would be willing to pay the former rates. What is Uber doing? It’s almost like they can’t squeeze the taxis enough either. Weigh in the bad press they have gotten over surge pricing. Just putting more drivers on the road would take care of that, yet they have not been satisfied with only doing that. Where I am taxi drivers are abhorred. No need to worry about them as competition.

ChilePowered

Additionally, Uber has stated that the drivers’ take would not be impacted by this latest rate adjustment down. Not true.

ChilePowered

Announcement today that they are adding music for the riders, via Spotify….data transfer costs on the driver’s bill.

This painful price cut is one of many nails into the rideshare coffin. The blantant greed being shown here at the cost of the “workers” is unsustainable.

Many drivers put thier heart and soul (not to mention time and investment) into this as a carreer choice. Most drivers didn’t just do this for the money, most did it for the love of the job. That fact is now being exploited.

It is unconscionable for anyone, company or individual, to turn someone against something they love for the sake of a dollar.

Even now, in cities with the deepest cuts, drivers are still out there, unknowingly paying everyday for the love of what they do. After factoring in vehicle costs to operate, they don’t realize they aren’t actually making a profit at these rates.

I’ve been reading your blog since I started driving in June, and have had much respect for your hard work and inciteful blogs. My driving career is ended now that my city rate is 0.85 per mile. We only have Uber here. I have to say this; I’m woefully dissappointed you haven’t been more vocal about this blantant driver abuse given the influence your site has. Nothing should be more important then the wellbeing of those who support you, we are worth more than 20%.

Thanks for the feedback, to be honest, it’s a tough spot for me to be in. My city wasn’t affected but I know that many of you guys out there were affected big time.

I’ve also gone through a couple fare cuts though so I know not to rush to judgement. The reaction that is going on is EXACTLY the same as the last time and the time before that. If it turns out that these rate cuts are really screwing over drivers, have no feat that I will be one of the first ones to talk about it.

wp

The difference this time is that rates are now so low as to actually create negative profits to the driver. It’s definitely happening across the board in these 48 cities. Many drivers are not aware of the true costs they put in. Rates may have been lowered 2 or 3 times everywhere, but never have they been to such a low range as to cause the driver to be losing money per mile.

As much as I know its touted, you can’t factor in the hourly guarantee because, as history shows, any incentive to the driver is eventually phased out but the rate decrease is always made permanent.

I get that time will tell, and I could be completely wrong about all this, but it’s tough to not feel that Uber is completely taking advantage of its driver base.

Yea it’s hard for me to tell too since I’m not in one of those cities that had rates cut. I have to rely on anecdotal evidence from all of you which is obviously not the preferred method. I like writing from first-hand experience.

I’m going to look at these cuts in detail next week and I’ll definitely be posting an update, you guys are convincing me, don’t worry haha 🙂

ChilePowered

Please keep looking, Harry. One thing in addition to consider, as I agree with the posts in this discussion from a driver’s perspective, is that Uber used to guarantee $25/hour in high demand times, trying to increase driver numbers. Now they are offering $20 or $15. Those are terrible gross per hour figures. Why do they keep squeezing drivers? Ditto from here on all the above mentioned points and details. Recently I’ve been out and only made $5/hr gross at times. Quite sad.

George Bonham

Drivers are getting smarter. So should you. As Uber constantly cuts rates, drivers realize that they must depend on tips to make $$. Somehow, Uber has misled passengers into thinking tips are included – which they are NOT.

A growing movement is underway to use the pax rating system to highlight passengers who tip. The new rating rules:
5 stars for all passengers who tip
2 stars for those that don’t
1 star for a minimum fare rider who doesn’t tip
Nobody gets a 3 or 4

This approach, along with the TAG (Tips Are Great) idea (When asked how you like driving for Uber, drivers reply that “It’s a lot of fun and the tips are great! ” are now increasing tip revenues for those drivers savvy enough to use them.

wp

There is no “somehow” about it, before the lawsuits Uber specificly claimed tips were included. Only after being sued have they changed the wording to “tips not necessary ” It’s crazy just how many riders are so ill-informed about this.

Uber has never claimed ‘tips are included’ but they have insinuated it by making riders enter a tip amount when they first sign up. But this only applies to Ubertaxi and most riders have no idea wtf that is. I agree that Uber is shady about the tip situation but I will defend them on this point.

Yes it is. I’ve covered this issue extensively already (see above link). There is no proof of these ‘marketing materials’. But I do agree that the ubertaxi setting a tip function is what caused all of this confusion in the first place.

Used to make 30 $ hour now18
This sucks
Also if u get hurt they are no help anif car is damaged they suspend account

Aaron P

Lower the rates, annihilate the competition, guarantee minimums to drivers, and lock up the regulators with an avalanche of great press from happy customers. Creating a movement is about divide and conquer. Stick around, enjoy the ride and tell then RSG sent ya!

I’m in Denver, and Uber is now charging my riders $.95 per mile. I made the mistake of getting a XL vehicle, and find very few rides are XL. Therefore I have XL expenses for X rides. The IRS allows $.56 per mile deduction, so you know the average mileage cost is above that. Since the actual mileage is at least 1.25 the Uber paid mileage (no pay getting to the rider) you have the following. $.95 X .8 = $.76/mile gross pay from Uber. Minus expenses ($.56 X 1.25 = $.70 expense) equals a profit of 6 cents per mile. If you drive 100 miles all day, you can’t buy lunch. Hope I can hold out till they raise the rates so we can afford to drive.

I just fixed my neighbors leaf blower for more money than I made all night hauling not so sober folks to wherever …… (took about 20 min.) Uber not looking too viable in my opinion.

Mrd

How about if Uber cuts rates they also cut their commissions in the same manner and percentage? (yeah I know I know)

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I'm Harry, the owner and founder of The Rideshare Guy Blog and Podcast. I used to be a full-time engineer but now I'm a rideshare blogger! I write about my experience driving for Uber, Lyft, and other services and my goal is to help drivers earn more money by working smarter, not harder. Read More…

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